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A.I. In Hospitality For Skeptics, with Jessica Kramer

 

Jessica Kramer, CEO of Lodgistics, understands that artificial intelligence is a complex and often confusing topic. In this episode, she speaks with host Robin Trimingham about what AI tools really are for hotels, common misconceptions, how hotels can benefit from the technology, and what advantages it can bring to hoteliers.

 

 

 

 

 

Highlights from Today’s Episode

Episode Sponsors:

This episode was supported through the generosity of the following sponsors:

Groupe GM  (groupegm.com)

For the last 50 years, Groupe GM, has been a leader in the luxury amenity industry. The Group proposes a 360 solution from manufacturing to distribution on cosmetics amenities and dry accessories. groupegm.com


 

Episode Transcript

Jessica: Everyone should be able to interact in their language. So allowing that, but still having two people able to communicate without being in the same language, all of that can happen, whether it’s in the booking flow, the operations flow on property, etc. That can all happen because of AI. It can lead to more revenue, of course, when you’re upselling. Can also lead to more revenue when you’re just giving people the better experience that they want. There’s cost savings, there’s revenue opportunity. All of those are available. AI is just a way of doing things smarter and faster and sometimes with fewer people.

 

Robin: Welcome to the Innovative Hotelier podcast by Hotels Magazine. With weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the Innovative Hotelier Podcast brought to you by Hotels magazine. I’m your host, Robin Trimingham, and my guest today is Jessica Kramer, CEO of Lodgistics. Today, we’re chatting about strategic ways to leverage AI to overcome hotel operational and logistic challenges.

 

Robin: For the last 15 years, GroupeGM has been a leader in the luxury cosmetic amenities industry. The group proposes a 360 solution from manufacturing to distribution. With over 40 international brands in its worldwide distribution network, GroupeGM offers different shapes and sizes of eco friendly products in hotels all over the world. Discover more on www.groupegm.com.

 

Robin: Welcome Jessica

 

Jessica: Hi. How are you? It’s so nice to be here.

 

Robin: Well, it’s great to chat with you today. I understand you do a tremendous amount of traveling, so I’m really glad that we were able to fit this in. It seems to me like just about every month at the moment, there’s a new AI driven product or service being launched in the marketplace that’s got the capacity to positively impact the hotel industry. So let’s start our conversation very simplistically here. I know that we still are talking to quite a few people when they hear the term AI. They’re thinking robots and movies, and that’s really not what we’re talking about at all. So can you sort us out a bit? When we talk about AI technologies, what does that really mean?

 

Jessica: Yeah, absolutely. I think that’s exactly right. People are picturing Westworld or Scarlett Johansson in Her. But really, artificial intelligence is a pretty broad set of technologies that simulate human intelligence using computer systems or other machines. So it’s really as simple as simulating human intelligence. So think it might be simulating visual perception, speech recognition, decision making, language translation, Right. Anything that you would think a human would need to do. A computer is learning how to do and can actually make decisions based on the information and data it’s taking in.

 

Robin: I love that you use the word learning, because if I’m understanding all of this right, AI is really just in its infancy and compared to what it will be able to do at some point in the future, and because of the world situation that we’ve experienced, some industries have adopted AI much more readily and more thoroughly than maybe the hotel industry has. To what extent do you really feel AI is being used in the hotel industry, and would you say that we’re lagging behind?

 

Jessica: It’s an interesting question. I think the hotel industry has typically lagged behind other industries in technology, and so you can think about the move to e-commerce or digital as areas where hotels adopted later. But we also do, as you said before, tend to think of those really visible symbols of AI, virtual robots or concierge that deliver towels, that kind of thing, as being what AI is. I think there’s actually quite a bit of AI already at play in hotels through the platforms that we’re using. So like Lodgistics, our company and other tools that are bringing AI based technology into the hotel, you might be using a lot of AI and automation and other machine learning just through your own tech stack without really knowing it. It’s not going to be in hospitality, its own layer in the tech stack. It’s going to be part of the tools we’re already using increasingly so.

 

Robin: That’s an interesting distinction that you make there, because those of us who understand even rudimentary AI, we get that what it’s known for is its ability to analyze and sift through huge amounts of data. But I think where there’s a learning gap on the human side, if you will, is how I can dynamically draw insights from this data. How AI learns to use your word. Can you explain this better to us?

 

Jessica: Sure. Let’s talk about an instance with multiple data sets, maybe like housekeeping, right? There is an ability for the system, the tool that you’re using in in that case, it would be an operations tool like Lodgistics, to proactively analyze the database and maybe compare the expected time to clean a room with the actual time and then maybe make an adjustment to your room boards throughout the day based on the fact that you’re pacing behind or not, or ask you if you’d like to adjust them. Right? That’s the kind of thing that I can do by taking information across multiple data sets that might be across many hotels or across the same housekeeper who has cleaned that room typically or always cleans your queen queens and do that comparison. So in a sense, it’s really just crunching a lot of data and then giving you the difference between what’s expected and what’s happening and making an adjustment. So that can happen in a lot of different contexts. But I think making it concrete with that housekeeping example helps understand what’s going on there.

 

Robin: Okay, So I follow you there. Let’s take this conversation one step forward. I can obviously understand that if you have a human saying, Hey, computer system, I would like you to analyze data and check for X, Y, and Z. That’s pretty straightforward. With A.I., once it’s fully integrated, can the system come up with ideas as to what it should be Checking?

 

Jessica: Yeah, absolutely. The more sophisticated systems can do that. I don’t think we’re there in all of our products and in all of the technology tools we use. But absolutely an example that you would see in almost every hotel is that your servers, you know, the actual cloud servers that your software is on will automatically adjust and readjust to ensure that you have enough computing capacity for the systems you’re running. Right. And that means that if a lot of people are on your site booking at the same time, your site’s not going to go down, You don’t even ever think about what’s happening there, but that’s all happening in the background using AI.

 

Robin: So I think that’s an excellent example, and I think that’s really where people need the help to understand. It’s the next level of what’s coming and why you need to embrace it now so that when the next level is available, you’re well positioned with your hotel property to take advantage of these things.

 

Jessica: Yeah, absolutely. Having your fundamental tools to run your business, whether that’s the right booking tools, the right operations tools, reputation management, all of the pieces that allow you to successfully service the guest. If you have those in place, you will have an improving AI situation and then there will be also fun AI for hotels and there already is like robots that maybe can take us somewhere. I think that’s a fit for particular property types and for particular market segments.

 

Robin: Yeah, no, I totally agree with you. A millennial or Gen X might think that the butler coming to the door as a robot with the towels is cool and granny might not be so into it. So let’s talk about booking systems a little bit. So right now I think everybody understands you can go on a laptop to a third party booking tool or a hotel brand website. You can make a booking, find your dates, put in your credit card, and the system confirms and emails you a booking confirmation. So how does AI technology change that standard process or even improve it in a way that leads to more revenue?

 

Jessica: Yeah, I think there’s a lot of opportunities there, right? We’re already seeing a lot of chat bots, right? There’s an opportunity for a chat bot to enter right in at that point, ask you a question. Maybe that question is, you know, I see you booked for December. Would you like to add our Christmas package? That could be something that’s understood based on the booking dates and then you’re interacting with that chat bot, maybe you say, What’s the Christmas package or No, thank you, I don’t like champagne. And then it could be like, Well, we do have horse riding at the time as well. Is that something you’re interested in? Right, Just taking into account what is happening in that booking flow. Also understanding maybe if the guest has stayed before integrating that information into the booking flow as you go based on what’s been entered, being able to automatically translate the booking experience, that’s something that we think is really important in operations tools and it’s also important in booking, right? Everyone should be able to interact in the language that’s most important to them and most fundamental and their comfort zone. So allowing that, but still having two people able to communicate without being in the same language, all of that can happen, whether it’s in the booking flow, the operations flow on property, etc. That can all happen because of AI. And so that really starts to change things. It can lead to more revenue, of course, when you’re upselling can also lead to more revenue when you’re just giving people the better experience that they want. There’s cost savings, there’s revenue opportunity, all of those are available. AI is just a way of doing things smarter and faster and sometimes with fewer people.

 

Robin: I love the example that you just gave of language translation because, yeah, I can totally see that if you’re going to a country other side of the world, not your language at all, yeah, you’re definitely going to be more likely to pick the hotel where the booking process was easy because you could understand it. So we talk all the time. Everybody I talked to who’s in the AI space that I will free people up to have more meaningful interactions, more high value interactions, human to human. But to be quite frank, most people don’t really come forward with examples of what those higher value interactions would be. And I realize that it is on the onus of the hotel, at least to a degree, to figure out how to better use people. But let’s just try a couple of really basic examples. One, I lived myself all the time because I have a hotel background. One of the properties I was associated with, it was a historic property, 750 rooms, nine wings, an enormous physical plant. And whenever a hotel phone didn’t work or heaven forbid, the key card, the guest had to walk about a mile and a half all the way back to the front desk to get some level of assistance, How would AI, Properly applied, improve that experience?

 

Jessica: Yeah, absolutely. So we’re in the process of building a module in our system at logistics that addresses exactly this and that You’ve probably seen in other hotels, which is guest messaging through text messaging, WhatsApp, whatever the platform is, that that in that location is common for those guests. So the ability to provide a way for people to message directly and then either utilizing AI to respond with an automated response. Right. And that’s where those chat bots and that that smart technology comes into place. The automation of messaging allows you to have the machine answer for you, but provide the language that you want, that great guest experience. You can, of course do it with translation again for a guest that doesn’t speak that primary language and that way the guest that really wants to call will still call. They’re still having a great guest experience, but a lot of guests don’t want to today. And so those guests are able to utilize a system that simply has that response ready to go. It recognizes that question. It recognizes every version of that question. Right. And can really say, okay, this is what I need to give as an answer. Now, there are disadvantages to some of this. I in the sense that these systems can also get expensive. So it really is about thinking about what’s right for your property and how do your guests interact. Doing that all via WhatsApp can be very inexpensive. Doing it via text messaging with automation can start to add up. So it really is about analyzing the right technology for your hotel.

 

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Robin: Now I just want to make sure that I heard you correctly. Are you saying with one of these text messaging systems what’s coming is the ability for the guest to type the message in their own language and the receiver on the hotel side gets the message translated into whatever language it is that they understand?

 

Jessica: Yeah, that’s exactly what I’m saying. And that technology already exists today and is being used in many customer service experiences around the world. You might see something like that on Amazon. If you have a question and you’re in a country, you’re not speaking in your first language. So that technology can also be brought to hotels and specifically to the guest messaging context.

 

Robin: So, you know, I think that is a game changer that would have value basically across the board. And it sort of segues into the next part of our discussion, because on the hotel side, one of the very typical and major concerns is that, okay, well, this AI stuff is all well and good, but you can’t really introduce it too far into a luxury experience because the luxury experience is built around human interaction. But I think maybe you’ve just given me an example of a very high value amenity that a luxury guest would really appreciate.

 

Jessica: Yeah, absolutely. I’ve been saying for years that our definition of luxury really today should be that luxury is choice, right? So am I a guest who wants someone to help me move my suitcase? You know, I’m not coming with kids. I’m not someone who necessarily wants that help. Maybe I’m tired. I got off. As you said, I travel a lot, right? Been on a lot of flights. I don’t necessarily want to chat with someone in that same way. Human interaction is really valuable when it adds value, but when someone would prefer to communicate in another way, giving them more choices is giving them more luxury. And I think that AI and tools, technology tools can really help with that. And then fundamentally having operational systems in place. And that’s really what we do at Lodgistics. We build people-first perations tools that allow the hotel to do that and do that well so that they free up time for those really important conversations where the guest wants to know how to spend their time while they’re in town or what they might do for dinner or where there’s a gas station nearby, something that only a person can help with. That’s really where the hotel can step in and spend that quality time with the guests. But giving the guests the choice to utilize a system that is already in place and that they use in most of their life the rest of the time as well.

 

Robin: Well, that makes sense. Can you give us any other examples of interesting ways that hotels are implementing AI?

 

Jessica: Sure. We’ve named a few already today. I think it’s text messaging, the automation of housekeeping boards, chat bots, translation comes to mind. In reputation management, you see sentiment analysis. I think that’s a really interesting one, right? Where you can sort of start to see the feeling of the themes that are coming up and how upset is a guest or what are the sort of things that you’re commonly seeing a complaint around. Cyber security’s another one where I can really help. You can have a lot of people on the site. What’s unusual behavior? What should you sort of start to put the walls down in your technology because you might be under attack or have penetration of your system. Load balancing with servers is another one. So there’s a lot of different applications and there are a lot, as I said, that are in place today and happening in the background that you might not even know. Google Translate, for example, is being used by many different technologies and you might never see that because it’s not in the layer you touch.

 

Robin: So it’s sort of a built in integration thing.

 

Jessica: It’s really built into the tool fundamentally as an integration.

 

Robin: Ok I understand techie, I don’t necessarily use the right vocabulary, but we’ll get there. Let me go back to the one thing you mentioned that’s new to me, So I’m thinking it’s going to be new to most of our listeners. Talk to us a little more about this sentiment analysis. Exactly what is it and how is it being applied or how do you envisage it will be applied?

 

Jessica: Yeah, so sentiment analysis can exist in a lot of different senses, right? So in Lodgistics today, for example, we have a glitch module where customer complaints could be logged in on the very simplest, in the very simplest form, you’re just kind of logging. What’s the sentiment of the guest on a spectrum? Sentiment analysis is where really where AI takes that to the next level and starts to point out themes between maybe issues in hotels and how guests are feeling. Right. So you can be more proactive like the guest that stays in the hotel room that’s next to the elevator, tends to complain more. Right? So maybe you want to start to think about, is that room too noisy? Is there anything you can do to buffer noise and really starting to understand where are those themes coming up? There’s sentiment analysis built into quite a few of the reputation management tools today that help you manage your online reviews and look at what is going on there. And sentiment analysis, as we’ve said in other cases, is being used in other industries quite a lot as well. So that’s something that can really help you start to get a hold of your data. And utilizing the data that you have is really important. Even before you touch AI, learning from what’s happening in your hotel and setting yourself up to make decisions differently as a result of that data, whether that’s looking at a room where the light bulb goes out over and over again, or the fact that on the fourth floor something is always going on that isn’t going on in other parts of the hotel, that data can really help you make decisions. And I can take it one step further and help you understand or recommend what decision you should make.

 

Robin: That’s interesting. We have a couple of minutes left here, so let’s change the conversation a little bit. One of the pushbacks from hoteliers has been that, Oh, well, if we have too much AI, we’ll have trouble maintaining workers, finding workers because they’re going to feel that they’re at risk of being replaced or whatever the case may be. When or do you think we’ll reach a point where the fact that a hotel property has an AI driven system will actually be viewed as a desirable workplace amenity by employees?

 

Jessica: You know, I think we’re I think we’re just about there. I think, as I’ve said, about AI as being a feature of the most cutting edge and advanced technology systems. And I think that having the best technology in place in your hotel can help hotels attract and retain the best talent. One of the things that makes Lodgistics different than the other operations tools out there, we call it People First technology. We we built our tech to take into account the fact that if you give staff great tools and tools that they love to do that, they will do their work well. And that requires you to build tools for diverse staff. So going back to that same theme of languages, right, someone has to be able to understand the work they need to do in their primary language. Or maybe if they’re not literate, using iconography, they need to have the ability to connect and collaborate using social media-like features. Right? All of that leads to retention in hotels, and that is how we’re going to solve the biggest crisis that we have in hotels is the labor crisis. You see already McDonald’s giving people iPhones to join their team, right? So we know that giving people great tools can make people better at their job. And like their jobs. We’re just not doing it enough yet in hospitality.

 

Robin: Or maybe not doing it in the best way possible. It’s interesting. If you’re an independent hotel or a boutique hotel and you’re listening to all of this, you might be really buying into the idea that I tech is the way to go. But for smaller entities, the capital cost and the time that required to recoup the benefit of that capital cost is a real consideration. What’s your advice to a smaller property or smaller chain that’s hearing this podcast? How do you differentiate between the nice-to-have and the must-have and where’s the tipping point on the ROI?

 

Jessica: I think it’s really about getting comfortable with the terminology, as you’ve said. AI, I don’t think it’s its own layer in the tech stack and I don’t think hotels need to think about having an AI strategy. I think that I will come into play inside the platforms that are already being used in hotels, and it’s about choosing the right vendors, right? Like logistics will implement AI powered products that hoteliers benefit from and they become part of the tool. So really the hoteliers, those boutique hoteliers, maybe not huge outlay of capital, they just need to get comfortable asking questions of their vendors. What does it mean when you say something is smart or AI powered or auto assigned or has a proprietary algorithm or predictive analytics? All of those things mean AI or machine learning or something similar. And so really understanding how your tools are utilizing AI and having a strong RFP process to choose the best tools and discover the right vendors for your specific hotel and market segment. That’s what it’s all about. And I think that all boutique, independent and branded hotels can approach it that way.

 

Robin: I think that’s really good advice. Supposing you’re listening to all of this and your hotel really hasn’t modernized from a tech perspective. I mean, you’ve got obviously you have security software, you have cybersecurity protection. But what if you’re really pretty basic? What’s your recommendation? How can somebody start learning about this stuff in an effective way so that they can learn what questions to ask, what to look for?

 

Jessica: Yeah, there are a lot of great ways to do that. There’s a lot of online information, right? There are platforms like Hotel Tech Report where you can compare technologies and look at technologies, and I would encourage people to go deep into their research on those tools, but also meet with vendors. I think you can’t do anything more important than get a demo of a system. You need to see the tool that you’re thinking about using and really make sure that you’re comparing those tools. And before you even do all of that, you need to figure out what do you need from a tool, What are your deal breakers, what are your necessities? You need to really go tool by tool, compare and understand. Does this tool meet your specific needs at your hotels? We’re a very diverse industry in terms of what properties can be, so it’s not just good tools and bad tools, it’s really about the right tools.

 

Robin: Thank you, Jessica. I think that’s a great place to start. This has been a very interesting conversation and I’m sure that our listeners are going to learn quite a lot from what you have to say. You’ve been listening to the Innovative Hotelier podcast brought to you by Hotels Magazine. Join us again soon for more up to the minute insights and information specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotel, your podcast by Hotels Magazine. Join us again soon for more conversations with hospitality industry thought leaders.


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